Report the 5 currencies that are most undervalued

Report the 5 currencies that are most undervalued - are The...

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1. Report the 5 currencies that are most undervalued, the 5 that are most overvalued and the 3 currencies that are closest to the PPP with the US dollar Most undervalued: Hong Kong Sri Lanka China Egypt Ukraine Most overvalued: Norway Sweden Switzerland Denmark Brazil 3 currencies that are closest to the PPP with the US dollar: 2. Do you see any pattern emerge? (i.e. is there any relationship between the currencies in each one of the categories) 3. Do you think the Big Mac Index is a good indicator of the average price level in these countries? What other specific factors could be affecting the price of a Big Mac?
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The Economist uses the price of the ubiquitous McDonald's meal to calculate the "Big Mac Index", a guide showing how far from fair value different world currencies
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Unformatted text preview: are. The Big Mac theory (a.k.a. purchasing-power parity, or PPP) says that exchange rates should even out the prices of Big Macs sold across the world. The implied PPP shown in the table is the exchange rate that would make a Big Mac cost the same abroad as it does in the USA. When you compare actual exchange rates with the implied PPP rate, you will see that most currencies are trading way above or below the US dollar, meaning that they are over- or undervalued. Keep in mind that PPP is a long-term indicator, pointing to where currencies ought to go in the future. (It's also best to use it only to measure currencies between countries that are at a similar stage of development.)...
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Report the 5 currencies that are most undervalued - are The...

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